Reliability-Based Design of Time-Varying Electricity Tariff

Implementing price-based energy management programs to change the consumption pattern of residential consumers has become an indispensable solution to the operational challenges of smart distribution power systems. However, practical methods to design efficient time-varying prices to improve the reliability and operation of distribution systems have remained scarce. This paper proposes a bi-objective optimization problem to design time-differentiated electricity tariff for residential energy management, where a new reliability evaluation method is employed to evaluate the reliability enhancement caused by load shifting. A set of numerical studies and sensitivity analysis are conducted to investigate the effectiveness of the proposed pricing method.